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Germans pledge to cut LSE trading costs

Deutsche BÃ¶rse is to make a commitment to slash the cost of trading shares by at least 10% as part of its proposal to take over the London Stock Exchange.

Werner Seifert, the chief executive of Deutsche BÃ¶rse, is also understood to be prepared to make a pledge that share trading costs for users of the LSE will never be raised if the German exchange operator is successful in its bid.

One option for Seifert would be to make a commitment that Deutsche BÃ¶rse would not switch clearing and settlement to its respective settlement and clearing businesses, unless it could guarantee a reduction in costs to customers.

Deutsche BÃ¶rse Sunday tried to head off mounting opposition to its attempted takeover of the London Stock Exchange by urging its shareholders to wait for details of its Â£1.3bn bid.

However, the terms of a strict confidentiality agreement with the LSE will prevent BÃ¶rse officials from launching a charm offensive this week to try to quash a rebellion among shareholders who believe that the exchange will pay too high a price for the prize City of London asset.

The rebellion gathered momentum Sunday when Standard Life became the first UK institutional investor to call on the BÃ¶rse to justify the proposed bid.

Standard Life, which owns about 1% of the shares in Deutsche BÃ¶rse but none in the LSE, becomes the first traditional UK fund manager to press for a vote on the deal.

So far, two hedge funds - The Childrens' Investment Trust and Atticus - have threatened to call an extraordinary general meeting to remove Deutsche BÃ¶rse's supervisory board if the deal is allowed to proceed.

Chicago-based Harris Trust, which owns about 3.4% per cent of Deutsche BÃ¶rse's shares, has said it wants shareholders to be given an opportunity to vote.

Under Deutsche BÃ¶rse's plan Clara Furse, the LSE chief executive, would report to Seifert and be responsible for running the enlarged group's equity trading operations.

Responsibility for derivatives operations will be handed to another member of management. Chris Gibson-Smith, the LSE chairman, is expected to be offered a role on the enlarged group's supervisory board or on the board of the subsidiary company that will operate the group's London operations and which will be regulated by the Financial Services Authority.